Crushing the Costs of Azure Virtual Desktops

Observations

Historically, managed services providers and IT departments in Australia have struggled with VDI implementation¹, as have many organisations running VDI on-premises. The COVID-19 pandemic exposed organisations’ Citrix VDI and virtual private network (VPN) infrastructure scalability issues. As a result, many organisations turned to the Cloud to scale out quickly and improve VDI performance. Some chose to replicate their existing Citrix/VMware environments in the Cloud, while others opted for Azure Virtual Desktops.

Moving existing Citrix or VMware infrastructure (that is, spinning up Citrix or VMware services and workloads to a Cloud environment) does not return many benefits to an organisation. It does not reduce management overhead and is generally more costly than on-premise environments. This is partly due to Microsoft’s changes to its Windows licensing terms in October 2019 (and again in 2022)² but is more due to the incompatibility in architectural designs of on-premise VDI versus the Cloud.

In contrast, adopting a Cloud-native PaaS approach to VDI, such as Azure Virtual Desktops, does offer new benefits (see breakout box 2). The key benefits come from infrastructure management, specifically designed to allow for scale up and down of VDI resources, an architecture and consumption pricing model that supports elastic scaling.

What is Azure Virtual Desktop?

Azure Virtual Desktop (formerly known as Azure Desktop Services) is a VDI solution offered by Microsoft as a part of its Azure Cloud platform.

From an architectural perspective, Azure Virtual Desktop (native) offers a PaaS control plane and Infrastructure-as-a-Service (IaaS) VDI infrastructure.

It allows organisations to deliver virtual desktops and applications to users over the internet from Azure data centres. With Azure Virtual Desktop, users can access their virtual desktops and applications from anywhere, on any device, making it an ideal solution for remote workers and distributed teams.

Azure Virtual Desktop supports Windows sessions and enables organisations to scale up or down their virtual desktop infrastructure as needed. It also offers integrated security and compliance, remote management and monitoring, and integration with other Microsoft services like Microsoft 365 and Teams.

Unfortunately, IBRS has noted a significant increase in organisations struggling with the costs associated with their Azure Virtual Desktop implementation and management of the Cloud-native environment.

As staff continue to work remotely, the expected post-lockdown downswing of VDI use has not fully materialised. Furthermore, staff use VDI for longer, often timeshifting their work hours in unexpected ways. Pre-pandemic expectations on usage patterns are no longer valid, and usage of VDI has increased in terms of the number of concurrent users and time spent on the services.

IBRS has noted three major problems that hinder the successful and economical deployment of Azure Virtual Desktops.

Problem 1: Architecture Principles and Mindset

Traditionally, one way to reduce the per-user costs of traditional VDI (such as Citrix) was to load as many sessions as possible onto the biggest server available. This approach required servers with massive amounts of memory, CPUs, and specialised storage. For large-scale, on-premise VDI infrastructure, these principles still hold true, giving hyperconverged architecture a renaissance.

However, with Azure Virtual Desktop, the opposite is true. The smaller the virtual servers, desktop resources, and storage, the better the cost-performance ratio. In other words, the more the resources are spread out, the better the performance and the lower the costs. This is because Azure Virtual Desktop is designed to work in the Cloud, where resources are more easily distributed and managed.

In short, Cloud-based VDI efficiency comes down to building block size: using smaller instances allows the environment to scale down faster. Larger building blocks are cumbersome to scale down.

Microsoft has a set of recommendations for Azure Virtual Desktops, which is a good starting point.

Decades of experience and principles for optimising VDI infrastructure are upturned with Azure Virtual Desktop, and desktop services teams need to make a significant shift in their thinking. They need to move away from the traditional approach of scaling up and instead focus on scaling out. This requires a new set of skills and knowledge, as well as a new way of thinking about VDI infrastructure optimisation in the Cloud.

Problem 2: Incomplete Management

The above two issues can be addressed by leveraging tools that utilise the following:

1. Predictive Demand: identify and predict usage patterns of the VDI environment.
2. Atomised Desktops: allow virtual desktops to be reduced to the lowest resources needed for specific users.
3. Scaled Desktops: allows for users’ virtual desktop resources to be scaled up the various atomised desktop configurations. For example, a user may need a very small virtual desktop for general office functions but later need to be upscaled to a high-capacity machine for data analytics or design functions.
4. Automated Scaling Out: allows many smaller servers to be spun up as demands increase. This needs to be done in tandem with the predictive demand of the need for scaled desktops.
5. Cost Management and Observability: even though Microsoft claims a significant benefit of Azure Virtual Desktop is the ability to visualise and optimise costs. However, the tools available natively with Azure Virtual Desktop do not go far enough. Azure Virtual Desktop clients should consider the following:
   1. Automated recommendation on procured versus actual usage. Ideally, the predicted demand should be as close as possible to the actual usage. Currently, Azure does not provide this level of analysis, though PowerBI can be used to create a dashboard to this effect.
   2. Cost attribution at a user and departmental level. Even if an organisation does not have chargeback models for VDI, this information allows the desktop teams to identify usage patterns that may be problematic, such as developers leaving batch jobs running for extended periods on high-performance virtual machines that could be better moved to smaller, much lower-code machines. It should be noted that the differences in VDI resource consumption between users can be significant: IBRS observed one environment where the cost per month of one user was US $19, while another was $140 per month. Pinpointing user consultation allows for behavioural optimisation of the environment, not just technical. It also enabled more accurate atomisation of the virtual desktops.
   3. Fine-tuning resources. The solution should be able to suggest optimisations of the servers and desktops they support. For example, IBRS observed that switching the virtual desktops to the default high-performance SSD (solid state drives) on boot, then switching them to standard HDD (hard disk drives) upon shutting down had almost no discernible impact on the performance of the desktops and load times, yet cut the storage costs significantly. Likewise, for virtual desktops with low demands, reducing the default size of the operating system disk space from the default 128GB to 64GB has little impact on performance while halving the costs. Azure Virtual Desktops do not support these highly granular cost optimisations, but their management can see the cost of Azure Virtual Desktop services reduced by 50 per cent or more. IBRS has observed savings of just under 80 per cent in one example where Azure Virtual Desktop was being used largely for remote office work. Savings will be less for more demanding users. Of course, managing these resources is a cost in its own right, which is why third party products that automate the process may likely be needed.

Problem 3: The Need for Management New Tools

While Azure Virtual Desktop provides some reporting capabilities and tools to help optimise the Azure Virtual Desktop environment, it does not enable the fine-grained cost management and observability discussed above. Discussions with Microsoft suggest that Azure Virtual Desktop will not have these features soon. Instead, Microsoft is encouraging customers to look at third party solutions, in particular, Nerdio.

Nerdio provides Azure Virtual Desktop management tools focusing on rapid image deployment, observability, and cost optimisation. The firm’s core business provided tools for managed service providers to run virtual desktops within Azure, but they have repurposed their solution for IT departments to independently manage their Azure Virtual Desktop environments.

Nerdio differs from the other Azure cost-optimisation vendors by narrowly focusing on Azure Virtual Desktop. While IBRS does not endorse specific vendors, it is fair to say that Microsoft’s active endorsement of Nerdio to its Azure Virtual Desktop clients indicates their leadership position.

Furthermore, IBRS has sought alternative options to Nerdio and conclude that the only practical alternative in Australia is either to engage a managed service provider (many of which use Nerdio’s MSP solution) or develop a management and observability environment of their own with PowerScripts and PowerBI to extend the native features of Azure Virtual Desktop. In this light, Nerdio’s IT department-focused option – Nerdio Manager for Enterprise – looks to be an attractive option with little competition.

Next Steps

• When planning to refresh or expand your organisation’s VDI, examine the potential for Cloud-based VDI, such as Azure Virtual Desktops, but carefully consider the ongoing consumption costs, gains, and benefits.
• Ensure that the technical team reviewing the costs of Cloud-based VDI understand the new (almost opposite to on-premesis VDI) principles for optimising costs and performance.
• Consider including third party Cloud VDI management tools to lower the ongoing costs.

Reasons Organisations are Dropping Citrix In Favour of Azure Virtual Desktops

• Scalability: with the COVID-19 pandemic, many organisations realised that their Citrix VDI and VPN infrastructure could not scale quickly enough to meet the demands of remote work. Azure Virtual Desktop allows organisations to scale up or down their virtual desktop infrastructure as needed, providing greater flexibility.
• Improved User Experience: since Azure Virtual Desktops scale quickly, performance issues that have plagued previous on-premise VDI or managed VDI services can be addressed with the click of a mouse (literally). As a result, Azure Virtual Desktop clients tend to report better end-user satisfaction.
• Cost-Effectiveness: Azure Virtual Desktop can be more cost-effective than Citrix, especially for smaller VDI farms (sub 500). It eliminates the need for organisations to invest in hardware infrastructure and can reduce ongoing maintenance costs. However, realising these cost savings requires significant effort and close monitoring of the Azure Virtual Desktop environment, and a different mindset to management and architecture of VDI.
• Integrated Security and Compliance: Azure Virtual Desktop has built-in security and compliance features, allowing organisations to meet regulatory requirements and secure data.
• Integration with Microsoft Services: Azure Virtual Desktop integrates well with other Microsoft services, such as Microsoft 365 and Teams, making it easier for organisations to manage their IT infrastructure.
• Lack of Innovation: while Citrix was once considered a leader in VDI, it has not been seen to introduce significant new features in the last few years. Clients are worried that with its buyout by Vista Equity Partners and Evergreen Coast Capital, the company is moving from growth by investing in technology to reaping licensing lock-in.

Footnotes

1. ‘Should You Outsource Your Virtual Desktop Infrastructure?’, IBRS, 2021.
2. ‘New licensing benefits make bringing workloads and licenses to partners’ Clouds easier’, Microsoft, 2022.